Goodyear Posts Loss; Sales Rise as Tire Maker Sees Stronger 2011
Goodyear Tire & Rubber Co. Thursday reported a fourth-quarter loss but projected 3% to 5% growth in tire sales this year and said it would close a Tennessee plant to cut costs.
Its net loss was $177 million, or 73 cents per share, compared with net income of $107 million, or 44 cents, a year earlier.
Total sales rose 14% to $5.1 billion, while tire volumes gained 4% to 45 million units. North American tire sales rose 17%, to $2.2 billion.
The company plans to close its Union City, Tenn., plant, which employs about 1,900 workers, by the end of this year, a move it said will save $80 million a year.
Raw material costs rose $158 million in the fourth quarter from 2009, and Goodyear said raw material costs will jump 25% to 30% this quarter from last year’s first quarter.
Several tire manufacturers have recently raised their prices due to higher raw materials costs.
Goodyear said it expects a 3% to 5% increase in overall tire unit sales this year.
The North American consumer replacement market will rise 1% and 3%, while the consumer original equipment manufacturer market will rise 5% to 10%.
The commercial replacement market, affecting trucks, will rise 3% to 8%, while the commercial OEM market segment will jump bewteen 20% and 30%, Goodyear said.
For all of 2010, Goodyear lost $216 million, or 89 cents per share, compared with a loss of $375 million, or $1.55, in 2009.
